Sam's Club extends same-day delivery to more than half of stores

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Dive Brief:

Sam’s Club has extended its same-day delivery partnership with Instacart to around 350 of its 600 club stores, according to a news release.

The expansion will touch more than 100 new stores and 90 new markets including Indianapolis, New Jersey and Houston. Sam’s Club kicked off delivery with Instacart back in February in three markets: Austin, Dallas-Fort Worth and St. Louis. The companies recently added stores in San Diego and Los Angeles, as well.

To promote the service, Instacart members in the new markets will be able to shop Sam’s Club stores without having to have a membership, while Sam’s Club members will receive special pricing.

Dive Insight:

Following the closure of 63 stores in January, Sam’s Club and parent company Walmart have turned their focus to digital growth. Many of those shuttered stores were earmarked to serve as e-commerce fulfillment centers, for starters. Then in February, Sam’s Club launched no-minimum free shipping followed quickly by its home delivery partnership with Instacart.

Walmart reinforced that digital focus earlier this week during its investors conference. There, executives said the company's digital business will become more personalized, localized and emphasize pick up and same-day delivery, with growth targeted at 40% for fiscal year 2020.

Sam’s Club’s delivery rollout is a response to competition from two very potent forces: Costco and Amazon. Costco has been doing a successful job of keeping members and drawing new ones who enjoy strolling through its massive aisles searching for bargains. Costco has also ramped up its online shopping efforts with a grocery delivery service and its own Instacart partnership.

Amazon, meanwhile, continues to steam ahead in online grocery — and in particular in the bulk-quantity products that Sam’s Club specializes in. The three top-selling grocery items on the site are Original Donut Shop 72-count coffee pods, 12-packs of Soylent meal replacement shakes and 100-count packs of McCafé Premium Roast coffee pods, according to a recent report by One Click Retail.

Sam’s Club is also facing pressure from BJ’s Wholesale Club, which recently went public and signed up a slew of new members in the wake of Sam’s store closures. Look for Sam’s Club to continue expanding home delivery in the months ahead, and to offer additional perks that up the value of its membership and store experience.

Instacart, meanwhile, rolls on following the news of its $600 million in new funding. The company has forged some big partnerships this year, including Aldi and Kroger, and remains the leading service by far in online grocery. The question is, how will the company evolve alongside its grocery partners and meet the challenge of numerous on-demand companies entering the grocery delivery field?